Procurement Management Plan

Procurement Management Plan 150 150 Affordable Capstone Projects Written from Scratch






Procurement Management Plan

<Project Name>





Company Name

Street Address

City, State Zip Code








Table of Contents

Introduction 3

Procurement Management Approach 3

Procurement Definition 4

Type of Contract to be Used 4

Procurement Risks 5

Procurement Risk Management 5

Cost Determination 6

Standardized Procurement Documentation 6

Procurement Constraints 7

Contract Approval Process 8

Decision Criteria 9

Vendor Management 9

Performance Metrics for Procurement Activities 9

Sponsor Acceptance 11

1.0 Introduction

In this section, you are to explain the purpose of the Procurement Management Plan, the general requirements for the project and describe at a high level how it will be managed from developing procurement documentation through contract closure.  In this section, you should also describe the item(s) to be procured, the types of risks that may be encountered and your general risk management approach, explain in brief assumptions and constraints and the types of standard procurement documentation that will be used.  In short, this section should provide a summary of the entire procurement management plan.



2. 0 Procurement Management Approach

In this section, you are to clearly identify the necessary steps and responsibilities for project procurement from the beginning to the end.  This should include the specific roles and responsibilities for each of the key players associated with each part of the procurement process.  You should describe in this section, how you as the project manager, will work with the project team, contracts/purchasing department, and other key players to manage the procurement activities.


2.1 Procurement Definition

The purpose of this section is to describe, in specific terms, what items will be procured and under what conditions.  Sometimes items which must be procured for a project can be made internally by an organization.  Additionally, procurement deadlines are usually affected by the project schedule and are needed by certain times to ensure timely project completion.  This section is where these items must be listed, justified, and the conditions must be set. Any important technical information should also be included. This section shall also include individuals with authority to approve purchases in addition to, or in the absence of, the project manager.



Item/Service Justification Needed By



In addition to the above list of procurement items, the following individuals are authorized to approve purchases for the project team:


Name Role





3.0 Type of Contract to be Used

The purpose of this section is to describe the type of contract to be used, and why, so the contracts and purchasing department can proceed accordingly. There are many different types of contracts like firm-fixed price, time and materials (T&M), cost-reimbursable. Different procurement items may also require different contract types.  A well-defined product may be a firm-fixed price while a product which will require a research and development effort may be a T&M contract.  In this section, you are also to explain the process (including roles and responsibilities) for defining the types, quantities, services, and delivery dates for the product or services to be procured.  Additionally, you should identify which entity in the organization will solicit bids and on what basis the contract will be awarded to the successful bidder.  The length and term of the contract to be awarded shall also be described in this section.


4.0 Procurement Risks

The purpose of this section is for you to identify any potential risks associated with procurement for your project. You should explain and list the specific risks that may be associated with your project. Depending on the contract type, items or services being purchased, vendor history, or uncertainties in the project’s scope, schedule, or budget, potential risks may require more detailed planning and mitigation strategies.  For instance, if an organization has a close relationship to a particular vendor but there is a chance that vendor will no longer to be able to provide goods or services needed, this represents a significant risk to the project’s procurement activities that must be managed.


4.1 Procurement Risk Management

The purpose of this section is to describe how risks related specifically to procurement activities will be managed.  In this section, you are also to describe the risk management considerations which are unique and apply only to your procurement.  You are to include a description of the involvement of specific personnel in managing procurement risks and how approval on mitigation steps from management within the organization will be obtained.


5.0 Cost Determination

The purpose of this section is to describe how costs will be determined and how they will be used as part of the selection criteria.  For procurements seeking goods and/or services from an outside vendor, costs are usually provided in the vendor’s response to a Request for Quote (RFQ), or Request for Proposal (RFP).  In this section, you are also to include a clear explanation of how you are requesting costs to be broken out (cost by task, costs by hours expended) by the vendor’s responding to your RFQ or RFP. You should also address how you will handle any omitted or incomplete information.







6.0 Standardized Procurement Documentation

The purpose of this section is to describe what standard procurement documentation will be used as part of your procurement.  In addition to the documents that will be used, you should also include the entity within the organization who is responsible for managing the documents and provide an explanation about where they will be housed within your organization.


7.0 Procurement Constraints

The purpose of this section is to describe any constraints which must be considered as part of your project’s procurement management process.  These constraints may be related to such items as schedule, cost, scope, resources, technology, or buyer/seller relationships.  You should also explain if and how these constraints will be part of any solicitation and how they will be communicated to others in the project’s procurement process.


8.0 Contract Approval Process

The purpose of this section is to define the process through which contracts must be approved.  In this section, you are to clearly define the process within your organization and who is involved in the decision-making.  Typically, large purchases follow an established bidding process and follow a formal selection and approval process.  Smaller purchases can be less formal and can be approved by the Project or Program Manager.  This section should clearly identify these steps and the rules for all procurements within your organization.


9.0 Decision Criteria

The purpose of this section is to define the criteria to be used to decide on what contract(s) to award.  The criteria to be used can be in the form of bulleted list.


10.0 Vendor Management

The purpose of this section is to describe the roles and actions the project team and purchasing and contracts department will take to ensure that the selected vendors provide all of the products/services agreed upon and that the appropriate levels of quality are maintained. In describing your specific actions to be undertaken (i.e. meetings), you shall explain the frequency, purpose, and proposed outcomes of each action you plan to undertake with respect to managing vendors.













11.0 Performance Metrics for Procurement Activities

This section describes the metrics to be used for procurement activities associated with the project.  These metrics may include but not be limited to: methods to ensure the project stays on schedule regarding procurement activities, and methods used to compile data on the performance of various vendors in order to assist with future procurement activities’.  In this section, you shall also explain the rating scale to be used to judge the performance of the vendor(s).




Vendor Description of Criteria 1 Description of Criteria 2 Description of Criteria 3 Description of Criteria 4 Description of Criteria 5
Vendor #1          
Vendor #2          


Criteria will be scored using the following formula:





Sponsor Acceptance 



Approved by the Project Sponsor:




<Project Sponsor>

<Project Sponsor Title>